Jio’s Unstoppable Impact: Telcos Lose Rs 37,284 Cr In Q4 2016; RCom Fires 800 Employees Due To Falling Revenues

The devastation caused by Reliance Jio is refusing to subside. Even as talks of the Prime offer and the subsequent Summer Surprise and its withdrawal are making the rounds of water cooler gossips, the loss triggered by the free offers since last 7-8 months is now gradually coming into the picture.

With rumours of Jio’s “Dhan Dhana Dhan” offers to replace Summer Surprise offer, the bleeding is expected to continue well through the end of 2017!

As per data reported by Telecom Authority of India, all telecom operators in the country, except Jio, encountered massive loss to the tune of Rs 37,284 crore during last quarter of 2016.

And as if to confirm the devastation unleashed by Jio, Anil Ambani-led RCom has fired 800 employees, due to falling revenues.

What else can change due to Jio?

Telcos Experience Heavy Loss Due To Jio

As per TRAI’s internal reports, the telecom industry in India suffered a massive 10.5% dip in revenues, during the period October-December, 2016, compared to the last quarter.

For the period July-September, 2016, telecom operators had churned out revenues of Rs 41,681 crore, which has now been reduced to Rs 37,284 crore. And if we go a quarter back, then telecom industry as a whole churned out revenues of Rs 44,754 crore.

Note here, that Jio had launched their Lyf handsets in the month of July, by middle of July, Jio had claimed 15 lakh users. By September first week, they launched their full-fledged services, and within 180 days, claimed to acquire 100 million subscribers.

And precisely this is the period when all other telecom operators suffered massive loss in revenues.

Some other highlights from the TRAI report:

• License fee declined to Rs 3698 crore for December quarter, down from Rs 4091 crore during July-September quarter
• Adjusted Gross Revenues (AGR) for all telecom operators declined by 9.17% to Rs 45,905 crore for October-December quarter, down from Rs 50,539 crore for July-September quarter
• Gross revenue of all telecom operators declined to Rs 66,532 crore for December quarter, down from Rs 71,378 crore for the earlier quarter

It is a pure and clear bloodbath unleashed by Jio, and the industry is still uncertain, as to what will be in future.

RCom Fires 800 Employees

In a related development, Anil Ambani led Reliance Communication has fired 800 employees, due to falling revenues. And Jio has been the trigger for this action.

As per various reports, such bad is the financial position of RCom that they are unable to pay their vendors, and salaries of several employees are also in hold.

Out of 800 employees which have been fired, several belong to upper management, which includes senior managers as well.

For the third quarter of 2016, RCom has already posted a massive loss of Rs 531 crore, while making revenues of Rs 4922 crore. Its overall debt stands at Rs 42,700 crore, and as of March 31, 2016, RCom had 9115 employees.

RCom had acquired Aircel in September last year, and the combined loss and subsequent termination of employees can be a result of the acquisition as well.

We will keep you updated as we receive more details..

Here is a video giving details of the Jio’s New Dhan Dhana Dhan Offer